Dive Brief:
- A.P. Moller-Maersk will reshuffle its business, integrating Damco's air and ocean less-than-container-load shipping, as part of its ongoing quest to provide end-to-end logistics for shippers, the carrier said Tuesday.
- Maersk will dissolve the Damco brand by the end of the year. The carrier merged Maersk Line and Damco into one organization at the beginning of 2019, and Damco's freight-forwarding business remained a separate entity. Maersk said it will not pursue asset-light freight forwarding, because the carrier "uses its own assets to offer unique value propositions."
- South-Africa-based carrier Safmarine, which Maersk acquired in 1999, will also be integrated into the Danish container line's operations, as the two brands have focused on "customer-centric culture and ... digital interactions with customers," Maersk said in the announcement. The Safmarine brand will no longer exist by the end of 2020.
Dive Insight:
Maersk has undergone rapid transformation in the four years since Søren Skou became CEO of the ocean shipping conglomerate.
Each restructuring, acquisition and divestment is laser focused on a central goal: to be an integrated logistics company and a provider of end-to-end services for shippers. The carrier has spun off lines tangential to this core, such as its oil drilling business, while it acquired customs brokers and warehousing providers, expanding its services and footprint beyond the waters.
Maersk dissolving the Damco and Safmarine brands further points to its strategy of integration.
"This might be a sign that the times of managing multi-brand strategies on the major deep-sea trades is slowly coming to an end," Lars Jensen, the head of consulting at Sea-Intelligence, said in a LinkedIn post, pointing to other examples such as CMA CGM ceasing the use of its APL brand on the Transpacific.
Hamburg Süd, of which Maersk closed its acquisition in December 2017, will still operate as a separate brand, but the back offices "will come closer together into more customer-centric teams," the carrier said in Tuesday's reshuffling announcement. But future restructurings and the long-term future of Hamburg Süd remain a question, according to Jensen.
Maersk described increasing shipper demand for "multiple modes of transport" as the rationale for incorporating Damco's air and LCL offerings into Maersk's logistics products. Many shippers opted to send smaller shipments via ocean, as airfreight rates skyrocketed and blank sailings from major carriers (including Maersk) resulted in delays, cancellations or rolled cargo for full container load shipments.
"One brand, one stop shopping," wrote Daniel Arth, global client manager at Maersk, on LinkedIn.
The reorganization will result in job cuts, Reuters reported, citing an internal email sent to Maersk employees. A spokesperson told Reuters between 26,000 and 27,000 employees "will be affected" but did not explicity say how many would be laid off.
